Morgan Stanley reduced its rating on ADTRAN (NASDAQ: ADTN) from Equal-weight to Underweight and established a $12.50 price target.

Morgan Stanley said, "We believe two of Adtran's traditionally largest customers, one of which includes AT&T, have either already completed the builds they were going to do with Adtran or are about to, creating large holes in Adtran's revenue line, while a 3rd, namely the Qwest side of CenturyLink, could begin to do the same next year. The falloff at its two largest customers we believe is likely what is behind the significant Q3 miss and equally weak Q4 guidance, and we do not believe those revs return next year."